Two owners of Nissan stores in the Cleveland area have filed a federal lawsuit against Nissan North America, alleging a confidential agreement by the automaker to provide a competing dealer with millions of dollars in financial support amounts to a discriminatory incentive program that violates both U.S. and Ohio law.
The suit, filed in U.S. District Court for Northern Ohio on Feb. 23, takes aim at Nissan's relationship with Bernie Moreno, owner of two Cleveland-area stores who has a deal to receive payments of up to $6.6 million over five years from the manufacturer to fuel his stores' sales growth and to cover the cost of relocating and building new facilities.
News of the aid was revealed in a court case related to an open Infiniti point Moreno was awarded in Coral Gables, Fla., and was highlighted in a Feb. 8 story in Automotive News.
The owners of Nissan stores neighboring Moreno's in Ohio argue that Nissan's subsidies allow Moreno to sell vehicles at a loss and take business from them. Their complaint contends Nissan's payments to Moreno violate Ohio franchise law because they give him an advantage not available to all dealers.
Ohio franchise law requires that "incentives have to be available to all dealers on the same terms," said Robert Poklar, an attorney at Weston Hurd representing the plaintiffs. "It has to be a level playing field for every dealer."
Poklar's clients are Matt Greenberg, owner of Mentor Nissan in Mentor, Ohio, and general manager at Bedford Nissan, which is owned by his father; and Michael D'Amato, owner of Nissan of North Olmsted and I-90 Nissan, in Sheffield Village. Both Greenberg and D'Amato declined to comment for this story.
Nissan said it is aware of the lawsuit but declined to comment on ongoing litigation. "Nissan is committed to building the strongest, most competitive dealer network possible to satisfy our customers and support our business objectives," Dave Reuter, Nissan's vice president for corporate communications, said via email.